Shares of Taiwan Semiconductor Manufacturing
TSM, -0.82%
fell 6.86 percent to 81.50 Taiwan dollars, on a day that the benchmark index posted its biggest-ever percentage point drop.

The Weighted Index fell 6.5 percent, or 350.95 points, to close at 5,081.28, its lowest finish since March 1996. Tech shares, which account for most of the index, plunged 6.7 percent.

Solid fundamentals

For the quarter ended September 30, TSMC's earnings rose to 20.01 billion Taiwan dollars ($617 million), or 1.74 dollars a diluted share, from 6.1 billion million, or 62 cents a share, in the year-ago period. The earnings were higher than analysts' expectations.

The third-quarter earnings include the results of the company's acquisition in June of local chipmakers TSMC-Acer and Worldwide Semiconductor, and are therefore not comparable to the year-ago quarter, said the company.

Those acquisitions, combined with higher unit sales and a higher average selling price, allowed TSMC to boost its revenues. Unit shipments of 8-inch wafers surged 102 percent to a record high of 942,000 units in the third quarter.

"Demand continues to surpass supply for the global dedicated foundry market [and] the company's monthly capacity utilization rate exceeded 100 percent for the third quarter of 2000," it said in a statement.

TSMC will probably have a hard time following up on its latest strong earnings going forward, especially as demand from personal computer and mobile phone makers is expected to slow next year. Chipmakers typically see peak earnings in the third and fourth quarters, which coincide with the U.S. holiday season, said Ben Lee, senior analyst at Nomura Securities in Taipei.

"The market fully recognized that TSMC's third quarter results would be very strong in advance," he said.

"But what most people are looking forward to is future performance next year. They're worried that weakening PC market demand will also slow down demand for foundry services," he added.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.